As a non-economist and a mere citizen, I feel compelled to share my observations on the state of our economy.
If my perceptions are flawed, I welcome correction, provided it contributes to the well-being of our economic system.
It’s imperative that we take decisive actions to mend our economy. We can’t afford to remain entrenched in defensive arguments from our respective domains.
The crux lies in finding the delicate balance between money supply and economic stability, as well as navigating the realms of inflation and growth.
The government may feel politically obligated to expand the economy and present a larger budget than in previous years.
Yet, constraints on tax increases, budget expansion, and expenditure limitations raise a pertinent question: Are these seemingly contradictory actions detrimental to the economy, or are they necessary for its equilibrium?
As the budget is being tabled, one must ponder the coherence between monetary and fiscal policies.
A harmonious alignment between these policies would see the budget achieving its intended goals: generating projected revenue, facilitating essential capital expenditure, and driving anticipated economic growth.
Unfortunately, the reality often falls short, necessitating frequent revisions and amendments, indicative of a concerning economic landscape.
The prevalent culture of excessive spending in the final months of the fiscal year warrants scrutiny and calls for measures to discourage such practices.
The dwindling contributions from the industrial and agricultural sectors, coupled with uncertain prospects in tourism, underscore the fragility of our economic diversification efforts.
The erratic fluctuations in budget estimations further exacerbate the situation, raising doubts about our economic stability.
If we earn from export or some service, it is fine. How much will be the government’s contribution to the remittance earned by selling labor by sending people abroad? What should the economy be sure of? What is the risk in this?
Of particular concern is the disproportionate surge in ordinary expenses, which fail to translate into increased productivity or revenue sources.
Inadequate capital expenditure only adds to the conundrum, hampering our developmental strides.
The prevalent culture of excessive spending in the final months of the fiscal year warrants scrutiny and calls for measures to discourage such practices.
Stability in our economy shouldn’t be mistaken for stagnation; sustained growth is the hallmark of a robust economic framework.
While investments in infrastructure, evident in improved traffic and connectivity, are commendable, their tangible contributions to economic advancement require careful evaluation.
In navigating the complexities of our economic landscape, fostering transparency, prudent fiscal management, and a collective commitment to sustainable growth are imperative. Only through concerted efforts can we steer our economy towards a trajectory of resilience and prosperity.
Is the expansion of roads linked to economic growth or not? Development is not for show.
Therefore, there is no harmony in development and economic growth. The state of suspension is visible.
Budget: Economic or Political?
Is our budget economic or political? If it was economic, it would be commercial. Projections would be reliable.
Estimates should be predictable. Did it become overly ambitious or political by reaching the unpredictable?
Recently, the government held an investment conference. The investment conference should attract focus on development. How much did that conference receive? However, it has not been felt that much hope has been awakened.
Contraction in the Financial System
In recent days, our overall financial system has seen a contraction. Real estate business seems to be the main sector of our economy and when it shrinks, the whole economy seems to shrink.
Meanwhile, real estate is traded all over the world, but what I think is the contraction of the agricultural sector and real estate, where is it connected with productivity? It doesn’t seem to be connected anywhere.
Why should agriculture be understood as traditional agriculture? If agriculture is connected with developed agriculture with modern technology, the importance of real estate would also increase. Without paying attention to this, the agricultural sector has been shrunk.
Question also arises: What we are saying now is that the foreign exchange reserves in the economy have historically increased. 17-18 billion has reached.
True economic democracy entails the participation and contribution of every citizen, not just specific sectors. Unfortunately, serious guidelines on economic democracy seem to be lacking.
We have said that we have reserves that can handle about 14 months of imports. Is this the amount that the government can claim? What is the government’s contribution to this?
If we earn from export or some service, it is fine. How much will be the government’s contribution to the remittance earned by selling labor by sending people abroad? What should the economy be sure of? What is the risk in this?
One day, as soon as the resource dries up in a country, what will be the result? How much of the foreign currency earned is being spent in the productive sector? How much did it contribute to increase productivity? Is it calculated or not?
Similarly, the stock market also seems to be very suspicious. How reliable are the financial indices of companies in the stock market? Are we directed towards a reliable economic system?
Our industries are also not productive, are shrinking, and closing. New industries have not come. The industries that have come are also not like industries. How much have we promoted agriculture-based industries? How much nationality is reflected in the export of goods?
Finding harmony between monetary policy and fiscal policy is essential for improving the health of the economy, fostering development, and achieving prosperity.
Yet, we face questions regarding whether these objectives have been met or if we are moving in that direction.
Success for the government and its officials should not come at the expense of economic failure. Either the government has faltered, or external interventions have led the economy to its current state.
The primary objective should be to enhance the financial capacity of the people through budgetary measures and economic activities. Every individual should feel inspired, supported, encouraged, and empowered to contribute to the economy.
True economic democracy entails the participation and contribution of every citizen, not just specific sectors. Unfortunately, serious guidelines on economic democracy seem to be lacking.
(Edited excerpt from the opinion expressed by former Chief Justice Kalyan Shrestha during the ‘Coherence between Monetary Policy and Fiscal Policy’ interaction program organized by Khabarhub and the Institute for Strategic and Socio-Economic Research (ISSR) this week)
Comment